Audit Reveals Potential Violations and Prolonged Estimated Meter Readings at RG&E/NYSEG

Extensive Audit Findings:: The audit report, nearly 500 pages long, highlights issues across cost allocation, performance management, cybersecurity, electric operations, and customer service.

Cost Allocation Issues:: Avangrid's complex corporate structure obscures cost transparency, making it difficult to determine if charges to NYSEG and RG&E are appropriate. _Why this matters: Opaque cost allocations can lead to unfair charges for customers and inefficiencies in utility operations._

Performance Management Deficiencies:: Incentive payouts for executives are subjective and not tied to specific goals for NYSEG and RG&E. _Why this matters: Lack of clear performance metrics can lead to misalignment of executive priorities and poor service delivery._

Cybersecurity Concerns:: Cybersecurity programs are not maturing adequately despite cost increases, posing potential risks to the utilities' infrastructure and customer data. _Why this matters: Weak cybersecurity can expose critical infrastructure to cyberattacks, potentially disrupting services and compromising sensitive information._

Customer Service Problems:: Inaccurate customer service performance indicator (CSPI) metric reports and inadequate controls for customer service outsourcing contribute to customer dissatisfaction. _Why this matters: Poor customer service erodes trust and can leave customers feeling helpless when dealing with billing issues or service disruptions._

Cost Allocations:: The auditor found that Avangrid's corporate structure complicates the process of determining whether charges allocated to NYSEG and RG&E are based on actual cost causation. The utilities receive goods and services from 13 corporate affiliates, limiting transparency and making it difficult to ascertain whether costs are being allocated appropriately. The recommendation is to revise and update the Cost Allocation Manual and simplify the cost allocation process.

Performance Management:: Performance management activities occur at the Avangrid level, without specific operational plans for NYSEG and RG&E. Incentive payouts for executives are subjective and not based on attaining goals specific to these utilities. The recommendation is to conduct a third-party review of the NYSEG and RG&E CEO’s individual metrics and discontinue discretionary assessments.

Physical and Cyber Security:: Physical and cyber security programs are administered at the Avangrid level, and the cyber security program is not maturing as it should, despite cost increases. The recommendation is to strengthen cybersecurity planning documents and metrics used to track performance and improve reporting to staff.

Electric Operations:: Asset management is handled at the Avangrid level, without a formalized and integrated asset management software platform. Avangrid underspends on asset management, contributing to NYSEG’s poor electric reliability performance. The recommendation is to implement an asset management system for NYSEG and RG&E.

Customer Operations:: Avangrid lacks appropriate controls for customer service outsourcing, augmented staffing invoice review and approval, or contract management. The auditor recommends determining the drivers of call center cost increases and verifying whether they are attributable to NYSEG and RG&E. Inaccurate customer service performance indicator (CSPI) metric reports require updating the CSPI process documentation, creating a formal override process, and enhancing quality control.

A:: The audit highlighted issues such as cost allocation, performance management, cybersecurity, electric operations, and customer service.

A:: RG&E and NYSEG must file a plan addressing how they intend to address each issue with the NYS Public Service Commission by June 18.

A:: The utilities stated they are reviewing and evaluating the Management Audit Report and look forward to responding with clear facts that will show their companies have fully complied with all laws, Commission orders, and regulations.

Increased Vigilance:: Monitor your bills closely for inaccuracies and report any discrepancies immediately.

Advocacy:: Engage with local representatives and advocacy groups to voice concerns about utility services.

Awareness:: Stay informed about the corrective actions being taken by RG&E and NYSEG to address the identified issues.